Contracts (and Jazz) Could Threaten Bulls' NBA Reign

By
James L. Tyson, Staff writer of The Christian Science Monitor /
June 10, 1997

CHICAGO

It is a historical truism that dynasties usually crack from within long before an enemy topples them from without.

Take the Chicago Bulls: The championship basketball team - one of the most spectacular sports dynasties in modern times - is turning against itself as it battles the Utah Jazz for its fifth National Basketball Association title this decade.

Even as the Bulls and Jazz wrangle for the pebbled orange ball, Bulls players and fans are keeping an eye on the negotiating room. There, the Bulls coach and key players are in the early stages of contract haggling that will decide whether the Bulls as we know them will gun next season for another championship.

Surely, there are no real threats to the goose that lays the golden egg!

Don't count on it.

Nine-foot-egos supercharged by slam-dunk greed could break apart the key links in the team's lineup. The final game of this best-of-seven series could be this dream team's last collective reverie. (Tied at 2-2, the Bulls and Jazz play their last game in Salt Lake City tomorrow before heading to Chicago for at least one more contest.)

As in most organizations held together by contractual agreement, the perpetuation of the Bulls' dynasty, if maintained, could hinge on a few key decisions involving money and tenure.

But there is one big sticking point that bespeaks the especially strong glue holding together the Bulls fellowship. Michael Jordan, considered by some the greatest professional athlete of the century, has hinged his return next year on the contract renewal of Coach Phil Jackson. Jordan also has made it clear that he wants the team to retain Scottie Pippen, his under-rated sidekick.

Jordan's tight embrace of Mr. Jackson has intensified the negotiating and financial pressure on the Bulls management.

Jordan reportedly seeks a contract that would net him $36 million. Jackson is reportedly looking for a surge that would carry his salary well above its current $2.7 million rate. Moreover, Jackson resists efforts by the Bulls management to sign a contract lasting more than a year. The Bulls front office wants him to help nurture a new generation of champions. After next season though, Jackson wants to take a year off.

For his part, Pippen is eager to remain with the Bulls. But as a free agent he has the option to bolster his comparatively modest salary with another club.

Dennis Rodman - the gifted rebounder with the checkered coif and image - might have pushed his signature flamboyance too far. Recent mediocre play and an earlier high-profile suspension have reportedly undermined his possibilities for staying on another year.

Even without Rodman, management confronts some intimidating payroll challenges. Like all NBA teams it must cap its payroll at $24.3 million. But it may pay free agents at whatever level they demand.

Only Bulls owners, managers, and NBA officials know whether the Bulls can shell out the additional millions of dollars that may be needed to retain the team's winning lineup. But many experts on sports economics reckon the team can do so.

"Despite a lot of moaning that goes on, most of the NBA teams are making quite handsome rates of return," says Allen Sanderson, a sports economist at the University of Chicago.

"Apparently the Bulls can stand quite a tab given what they paid last year," says Robert Baade, an economist at Lake Forest College in Lake Forest, Ill. "Even if the Bulls have to register a loss for one year, that can be made up in other ways in other years," says Mr. Baade.

"The Bulls are definitely at the peak of their earning power as a franchise right now," says Alan Friedman, executive editor of Team Marketing Report in Chicago.

Indeed, team salary trends suggest that there is an increasing number of dollars chasing a limited number of players. Now, some of the pelf is sloshing across the sidelines and onto the coaches.

Last month, the Boston Celtics signed Rick Pitino for 10 years at $50 million, the Philadelphia 76ers signed Larry Brown for a five-year, $25 million deal, and the Indiana Pacers brought on Larry Bird for five years at $22.5 million.

A higher investment in coaching salaries might yield a hefty return. Indeed, the widely publicized and mutually lucrative partnership between Jordan and Jackson showcases a new vein of potential profit for the Bulls and other NBA teams. The rise in coaches' salaries illustrates what economists call a "complementary input." Once investment in a product tops out, a business invests into a related good in order to bolster its overall return and gain a comparative advantage.

Unable to spend much more on players, managers are spending more on coaches. Already, the prominence of NBA coaches is growing along with their salaries. They are becoming a more marketable feature. "All of a sudden," says Mr. Sanderson, "the coaches have become a part of the effort to sell a product."